Since the launch of the development challenge solutions approach in 2014, we have been highlighting what OBA or RBF can do as a tool, amongst other interventions, to help solve wider development problems faced by our clients. This shifts thefocus from project lessons to thematic lessons, albeit that emerging themes are supported by what we learn from different projects. At last week’s water week event led by our GP Water colleagues, the thematic approach was reflected by TTLs themselves as they highlighted OBA in several discussions summarized below:
Learning and innovating: In a plenary panel with the Secretary of Water Resources of the Govt of Argentina, Bill Kingdom cited OBA as one of several Bank innovations, highlighting its ability to provide targeted capital grants for the poor to gain access to basic services
PPPs: OBA featured prominently in the discussion on PPPs, with several TTLs citing it as a tool to help governments implement a PPP agenda while ensuring that the poor are not excluded from services provided by the private sector. Examples cited include the Manila water and Sri Lanka sanitation GPOBA-financed projects, as well as the rural water project in Benin that adopted a results-based capital subsidy model funded by ODPs.
Blended financing: With the need to leverage private sector commercial finance for investment in water supply and sanitation becoming ever more evident, OBA was cited as one of the instruments, amongst a host of credit enhancement tools and technical assistance, to help leverage local currency commercial debt for investment in infrastructure. OBA was also a key part of the financial analysis training being conducted for TTLs, and features in a knowledge note on blended financing prepared for the 2016 Spring Meetings: https://openknowledge.worldbank.org/handle/10986/23996
Rapid urbanization: The urban analytics work highlighted the fact that low-income households often suffer from a host of problems, such as poor water and sanitation, poor garbage collection, lack of access to energy, transit problems etc, yet most interventions tend to be sector specific. OBA was discussed as one of the financing instruments that can support upgrading of low-income areas. The analytics highlights the need for a wider urban services OBA intervention in the future.
P4R: OBA/RBF were discussed in an energetic session on P4Rs in the sector. OPCS noted that the interventions do not conflict but rather complement each other – OBA/RBF projects funded by TFs are useful for pilots and projects, while P4Rs should be used to support programmatic interventions. An interesting debate ensued about the ability to use P4R to support utility level financing in countries where the national law does not permit the transfer of federal funds to the utilities (Brazil and Mozambique being cited amongst others).